TheChek News Flow

- Suggests no changes are expected in the near term. - The BoE's current inflation target is 2.0%.

Clariant, a world leader in specialty chemicals, today announced the closing of the sale of its Leather Services business to Stahl Holdings B.V. as of April 30, 2014.

Stahl, majority owned by Wendel Group, is a Dutch company providing high-quality chemicals, dyes and coatings for leather and other applications. The combination of both businesses has created a global leader in leather chemicals with a higher growth profile than the standalone entities and with significant synergy potential.

As announced on October 30, 2013, Clariant has received a cash consideration and a 23% stake in Stahl for the sale of its Leather Services business. The minority shareholding will allow Clariant to participate in the upside potential of the enlarged Stahl. Wendel remains the principal shareholder of Stahl with approximately 70% of Stahl's capital.

The closing of the Leather Services transaction marks the last major step in the repositioning of Clariant's portfolio. The company has already divested the Business Units Textile Chemicals, Paper Specialties and the Business Line Emulsions on September 30, 2013, as well as the Detergents & Intermediates business on January 6, 2014.

Source Company Press Release*

AstraZeneca’s Johansson hits at Pfizer ‘big is better’ bid

AstraZeneca warned that “bigger is not always better” as it launched its defence against Pfizer’s £60bn approach, but some of the UK pharmaceutical company’s biggest shareholders signalled they would be open to a takeover at the right price.

Leif Johansson, AstraZeneca chairman, on Wednesday highlighted the mixed record of big mergers in the pharmaceuticals industry as he urged investors to keep faith with the company’s drive to revive growth by developing new drugs on its own.

However, several big shareholders said they would support a deal if Pfizer raised its offer, and that they would not be influenced by political concerns over what would be the biggest foreign takeover in UK history.

Meanwhile, Downing Street has appointed two of the most powerful officials in Whitehall – Sir Jeremy Heywood, cabinet secretary, and John Kingman, a top Treasury mandarin – to lead government talks with Pfizer over its plans for one of Britain’s biggest and most strategically important companies.

AstraZeneca has so far refused to enter negotiations with Pfizer over an informal £46.61-per-share offer that it said “significantly undervalued” the company. Mr Johansson told the Financial Times that he saw no reason to change that stance in the absence of a higher bid.

Rejecting Pfizer’s argument that the UK company would benefit from bigger scale, he said: “Big is not necessarily best in pharma.

“It is highly questionable whether big consolidations have led to greater success in getting new medicines to market,” he added. “AstraZeneca is big enough to create good value for shareholders and other stakeholders by itself.”

Ian Read, Pfizer chairman and chief executive, on Wednesday made his case to large AstraZeneca shareholders during a second day of meetings in London aimed at winning support from the City and the UK government.

One top 20 investor said: “We are impressed that Pfizer has made an effort to come and see us. That shows how serious they are. They have listened to us and been impressive.”

A top 10 shareholder said the proposed deal could be “a great fit”.

“There are huge synergies here . . . [but] we would like a better offer than what Pfizer has so far offered,” the investor added.

Other shareholders said the City would not be influenced by concerns over what a deal would mean for jobs and investment in UK life sciences. AstraZeneca employs about 7,000 people in the country and accounts for more than 2 per cent of exported goods.

A top 10 investor said: “We are not particularly protectionist, like the French, and are much more open. Commercial logic and price determines whether we back a deal or not.

This is even more the case now than it was 20 years or more ago as the world has become a smaller place in a business sense. The FTSE is made up of global companies.”

Mr Read met George Osborne, chancellor, Jeremy Hunt, health secretary, and David Willetts, universities and science minister, in three separate meetings on Tuesday night. He also had a conference call on Wednesday with Vince Cable, business secretary, on the way back to the airport after his 48-hour trip

One minister familiar with the talks said: “This is the difference between shareholders and government. Shareholders may not care [about national interest] but public policy and government matters, and we are custodians of the wider view. Pfizer are engaging with us because they value life sciences.”

GlaxoSmithKline on Wednesday indicated it would not be tempted to mount a “white knight” bid to combine the UK’s two biggest drugmakers. Sir Andrew Witty, chief executive, reiterated his longstanding scepticism about the merits of big pharma mergers, highlighting the risk of disruption to research and development.

Profit And Sales At Unit Will Be Down 10% This Year, Company Says

Rolls-Royce Holdings PLC Thursday cut the outlook for its marine unit due to production problems that will lead to a one-time charge of about £30 million pounds ($50.5 million) and hit profitability.

Marine profit and sales this year will be down 10%, the London-based company said in a statement. Rolls-Royce had previously said profit in the sector would see modest growth on a reduction in revenue.

Rolls-Royce didn't provide further details on the "product quality issue" that triggered the adjustment.

The company also said currency effects from the strong U.K. pound will represent a £40 million hit on profit and £300 million on sales at current exchange rates. The impact comes from repatriating sales in other currencies to the U.K.

At group level the company maintained its outlook for no growth this year with cash-flow on a par with 2013 levels. Growth should resume next year, the company said.

Rolls-Royce said April 29 it was in talks with Siemens AG over the sale of its commercial energy production assets. Talks that involve the gas turbine and compressor activities haven't concluded, it said.

The British manufacturer also this month agreed to pay €2.43 billion ($3.36 billion) to Daimler AG for the German car maker's remaining 50% stake in diesel engine maker Tognum AG, now called Rolls-Royce Power Systems. The transaction should close in the next five months pending regulatory approval.

Elon Musk Company Wants the U.S. Air Force to Open Satellite Launches to Competition.

A Boeing and Lockheed Martin joint venture working for the government was barred by a U.S. court on Wednesday from dealing with a Russian supplier of rocket engines used to shoot air-force satellites into space.

Elon Musk's Space Exploration Technologies Corp., or SpaceX, won a temporary injunction against the U.S. government and its contractors Boeing and Lockheed operating as United Launch Alliance.

The air force and United Launch Alliance is prohibited "from making any purchases from or payment of money to NPO Energomash", Federal Claims Court Judge Susan Braden said late Wednesday in a temporary injunction.

United Launch Alliance, the air force and NPO Energomash weren't immediately available for comment.

SpaceX is challenging United Launch Alliance's near monopoly on military- and intelligence-satellite launches. It wants the Pentagon to open them to competition.

It drew attention to its rival's use of the RD-180 rockets made by Russia's state-controlled NPO Energomash OAO. U.S. defense officials and lawmakers are uneasy about the air force's reliance on Russian engines in the wake of the Ukraine crisis.

The engines are supplied by RD Amross, a joint venture between the Russian company and a unit of United Technologies.

The air force has looked into alternative rocket engines including building them in the U.S. under license or fast-tracking a new domestic design.

A combination of AT&T with satellite-TV firm DirecTV would create a pay television giant close in size to where Comcast Corp. will be if it completes its pending acquisition of Time Warner Cable. TWC +0.09%

DirecTV is the second biggest pay TV operator, serving about 20 million customers, while AT&T's landline-based TV business serves about 5.7 million. The nearly 26 million subscribers served by the combined company would compare with Comcast which—with TWC—would serve close to 30 million subscribers.

A deal would likely be worth at least $40 billion, DirecTV's current market capitalization, a fraction of AT&T's $185 billion market capitalization.

AT&T declined to comment. DirecTV declined to comment

The approach has come since Comcast struck its Time Warner Cable deal in February, one of the people said. It is unclear whether the companies are in detailed talks, but another person familiar with the situation said that DirecTV would be open to a deal. The satellite TV industry is facing a slowdown in subscriber growth after years of adding customers. The pay television market in the U.S. is now mature, with about 90% of U.S. households with TV now subscribing to either cable, satellite or phone company-delivered television.

And satellite firms' inability to offer Internet access that is competitive with cable and phone companies is becoming a bigger issue.

Since 2010, DirecTV's rate of subscriber growth in the U.S. has fallen every year, compared with the prior year. Last year, DirecTV lost subscribers in a quarter for the second time ever, in a deeper loss from the year-ago quarter when it saw its first such loss, according to MoffettNathanson LLC data.

Acquisition of DirecTV would give AT&T a national footprint in pay television at a time when the telecom company sees video delivery as core to its future. An acquisition would allow AT&T to offer bundles of wireless and TV services, and could give AT&T new ways to deliver video to its mobile and broadband customers.

AT&T's interest in owning a satellite television provider has been speculated about for years. The telecom carrier has held talks with both Dish Network Corp. and DirecTV in recent years, according to people close to the situation.

AT&T already has a partnership with DirecTV to sell its service in areas where it offers broadband but doesn't offer its U-verse television service.

AT&T, which has grown rapidly from a regional telecommunications firm into one of the U.S. industry's two largest companies via an aggressive merger strategy, had been expected to make its next move into Europe. But Chief Executive Randall Stephenson said at an investor conference earlier this year that Comcast's proposed purchase of Time Warner Cable has shifted his priorities, leading him to refocus on the U.S.

"It's an industry redefining deal from our standpoint," Mr. Stephenson said.

Whether regulators would agree to a DirecTV-AT&T merger is a major question. Comcast's Time Warner Cable deal faces tough regulatory scrutiny and a second pay-TV merger would likely intensify regulatory and political questions surrounding consolidation in the industry.

Any acquisition would likely be evaluated by the Justice Department for its impact on competition and would require approval by the Federal Communications Commission. The companies would have to prove to the FCC that the transaction would be in the public interest and the combined company would be able to offer consumer benefits not possible outside the merger. However, a person familiar with the FCC's thinking predicted the merger would have a solid chance at approval because offering video or voice service alone is viewed as a dying business and the combined company would be in a position to compete with Comcast, the leading cable and broadband provider.

Competition in the broadband market is likely to be the central issue in any review. Observers say the deal would be more likely to gain approval if the combined company can show it would provide competition for Comcast and other cable companies in the high-speed broadband market. A source familiar with antitrust reviews said regulators would likely be concerned about the impact on markets where AT&T already offers high-speed broadband access and pay-TV via its U-Verse project. AT&T may be required to divest DirecTV subscribers in such markets.

Observers also noted that the deal would increase the pressure on Dish Network to enter into a merger with a wired or wireless broadband provider.

Despite DirecTV's recent slowdowns, satellite investors point out that it has continued to outperform its cable rivals. And part of the drop-off in subscriber growth is due to the company's strategic focus on adding only higher-value customers who are less likely to chase discounts and switch providers. One investor called the company's results "outstanding" both "operationally and in terms of share appreciation" thanks to big stock buybacks. But the investor noted that built into the value of DirecTV's shares is some anticipation of the company being acquired in the future.

DirecTV and satellite rival Dish attempted a merger more than a decade ago which was blocked by regulators. Dish has lately approached DirecTV about trying again, say people familiar with the situation, although that approach hasn't led to any serious discussions. While executives from both companies have publicly signaled their continuing interest in the idea, they have also noted that the two companies have taken different strategic routes, and regulatory attitudes to a merger remain unclear

Dish declined to comment.

Woodside, the ASX-listed oil and gas business, has expressed doubt over the potential returns available from Israel’s Leviathan gas project, the Australian Financial Review reported.

The report cited Woodside’s chief executive, Peter Coleman, as saying that changes to the project’s development plan to favour exports by pipeline over floating LNG may have reduced the investment’s attraction for Woodside. Coleman noted that the increased pipeline component has reduced the upside for Woodside.

The item noted that Coleman’s comments indicate that Woodside’s involvement in the project is increasingly uncertain.

The report said that Noble Energy said last week that it would not wait for Woodside to buy into the project before proceeding with development. Noble and its partners are working on several deals to sell gas from the project to neighboring countries through pipelines. Coleman noted that when the deal was first mentioned in December 2012 the plan was for a floating LNG plant that would export gas by tanker to Asian markets.

Coleman noted that it was a hard decision not to enter an agreement with Noble on the 27 March target date, but the company had to ensure the deal offered adequate returns.

Woodside is seeking to acquire 25% of the Leviathan field, the report said. Coleman noted that talks are still ongoing.

Source Australian Financial Review

US Market closed higher with Fed Taper again, the Dow registering a new record closing high at 16,580.84, which represented its first green close for the year...Yesterday's session featured another heavy dose of earnings and a full slate of economic data. Prior to the open, index futures jumped in reaction to a better-than-expected ADP Employment report, but promptly surrendered those gains when it was reported that GDP increased a puny 0.1% in the first quarter (consensus 1.0%). FED Commenrts about Economy & the decision to cut anothe 10b froms its monthly purchase helped mkt to recover (wording : growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions)...boosted by end of month volume were above average @ 892mil...VIX @13,41 -2,19%...  The start of Labor Day holiday weekend across much of the far east has kept market volatility to a minimum. China govt put out its official manufacturing PMI just shy of the consensus estimate. Despite the miss, the headline figure marked a 3-month high and a 2nd consecutive month of improvement...USD/JPY pair traded in a 20pip range around ¥102.20, despite another nudge by Japan PM Abe's influentiel economic adviser Hamada toward more easing if the impact of higher sales tax becomes more pronounced....Nikkei +1,11%...Hang Seng closed...Shanghai closed

Eur$ 1,3882 S&P Fut Flat European Fut closed FtseFut +0,10%

Macro 

- Fed Reduces QE to $45b/mo., Keeps Low-Rate Pledge Same

- China April Manufacturing PMI 50.4; Est. 50.5

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- RB/ LN : Not anymore indiscussions with Merck

- REP SM : Repsol Names Imaz CEO to Start ‘New’ Phase in Management

- RR/ LN : Rolls-Royce Sees Weaker Marine; Group Rev, Profit Flat for Year

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- WEIR LN : Weir Group Full Year Guidance Unchanged; 1Q Op. Margins In Line